The Pentagon has decided to honor Marine Sgt. Rafael Peralta, who died in Iraq, with a Navy Cross, the military's second highest valor award.

Family and friends of a San Diego Marine killed when he smothered a grenade to save his buddies in Iraq said they're angry over the Pentagon's decision yesterday to award him the Navy Cross instead of the Medal of Honor.

The mother of Sgt. Rafael Peralta said she may reject the medal, the military's second-highest award for valor. She said a general told her that her son's nomination was tainted because he had been first shot in the face and torso by friendly fire.

“There is conflicting evidence whether he performed the acts deliberately,” said Navy Capt. Beci Brenton, a spokeswoman for Navy Secretary Donald Winter. But the Navy Cross citation characterized Peralta's actions as intentional.

Peralta's mother wonders whether military officials denied him the top award because he is Hispanic. Peralta was a Mexican citizen and a legal resident of the United States. His mother, Rosa, and his sister Icela recently became U.S. citizens.

“Sometimes I think I can't fight the government, but I feel I should fight. . . . I may be ignorant, I may not speak English. But I will fight for my son,” Rosa Peralta said from her daughter's home in the Webster neighborhood of San Diego.

“Everyone thought he would get the Medal of Honor. I think he earned it. All his fellow Marines said they felt he earned it,” Rosa Peralta said yesterday evening.

President Bush had praised Peralta's valor in a speech, and his story was featured in a documentary.

“(Winter) determined that leadership and bravery that day were consistent with the Navy Cross,” she said. “It didn't meet the very stringent standards for the Medal of Honor.”

Brenton said emphatically that neither the friendly fire nor Peralta's Mexican citizenship played a role in the decision.

“Absolutely not,” she said.

This was the first time the Pentagon has publicly acknowledged Peralta was hit in crossfire between Marines and insurgents.

Peralta fell on Nov. 15, 2004, after being shot during a firefight inside a house during the second battle of Fallujah.

Insurgents threw a grenade that landed next to him as he lay on the floor. Peralta, 25, scooped up the grenade and hugged it to his chest “without hesitation and with complete disregard for his own safety,” the Navy Cross citation says.

The action saved the lives of several Marines standing a few feet away, Marine Corps officials said.

Numerous soldiers and Marines have received the Medal of Honor after covering grenades. That includes three of the five Medal of Honor recipients in the Iraq and Afghanistan wars: Army Pfc. Ross McGinnis, Navy Petty Officer 2nd Class Michael Monsoor and Marine Cpl. Jason Dunham.

As the investigation into Peralta's combat heroism dragged on for nearly four years, there was widespread feeling among Marines and veterans that Peralta deserved the Medal of Honor, too.

Robert Reynolds, a former Marine who credits Peralta with saving his life in the Fallujah house, said the Pentagon's decision insults his honor.

“I feel like the Navy Cross is a cop-out,” said Reynolds, 31, of Ritzville, Wash. “I was 5 meters away. I saw what happened. I feel like they're calling me a liar.”

Former Marine officer Tom Richards is disappointed that Peralta didn't receive the highest combat distinction. He is national president of the Legion of Valor, and he was awarded the Navy Cross in the Vietnam War.

Richards is among many veterans who have criticized the Pentagon for awarding so few Medals of Honor – the purpose of which, he said, is to inspire other service members.

“Like many of us, I'm wondering why the Department of Defense is so stingy with medals in these conflicts,” said Richards, who lives in Rancho Bernardo. “(Peralta) died of his wounds, and clearly what he did was heroic.”

A group of Marine commanders, led by Lt. Gen. Richard Natonski, briefed the Peralta family on the Pentagon's decision yesterday at Camp Pendleton.

“We've waited three and a half, four years for this,” said David Donald of San Diego, Peralta's brother-in-law, who attended the session. “It's just kind of a slap in the face.”

Former Marine George Sabga, a lawyer and friend of the Peralta family, also went to the briefing. He said leaders of the Marine Corps and U.S. Central Command agreed that Peralta's heroism merited the Medal of Honor.

But the office of Secretary of Defense Robert Gates downgraded the award after a special investigation involving medical experts, a military general and a Medal of Honor recipient from a past war, Sabga said.

Yesterday, Pentagon officials said the Navy Cross is an extremely high honor. Only 23 service members – 17 of them Marines – have received the award for combat actions in Iraq and Afghanistan, according to the Web site homeofheroes.com.